Republicans are taking ethics shots at Sen. Michael Bennet late in the close race for U.S. Senate, saying Bennet had a conflict of interest while Denver schools chief by holding JP Morgan Chase stock while backing a complex pension deal that saw DPS pay the firm $1 million.

Ken Buck's Republican senate campaign says the district and board should have been told about Bennet's stock holdings at the time of the 2008 negotiations for a $750 million refinancing deal aimed at shoring up school pensions.

"Michael Bennet needs to tell Coloradans why he pushed through such a risky deal, without disclosing the fact that he had thousands and thousands of dollars invested in JP Morgan," John Swartout, campaign manager for the Republican Buck, said earlier this week.

Bennet's campaign called questions about his former stock holdings irrelevant and desperate.

"Another shameless, factually inaccurate attack from Ken Buck falls flat and only calls into questions his past," said Bennet spokesman Trevor Kincaid. "Buck is the only candidate in this race who has been ordered by a judge to take ethics classes and was condemned by his peers for misconduct."

Bennet's campaign said his stock picks were made by a financial manager and that he ended up losing money on his JP Morgan stock when the advisor sold off assets as the Democrat joined the Senate.

Asset disclosures required by the U.S. Senate show Bennet sold JP Morgan along with many other holdings in January 2009; at that time, his JP Morgan holdings were worth between $50,000 and $100,000.

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The disclosure rules do not require exact amounts, only ranges. Bennet's staff has said previously he lost more than $1.4 million in selling dozens of stocks on Jan. 27, 2009, at a low ebb of the market. Bennet reported assets of between $6 million and $27 million when he joined the Senate.

From the April 2008 DPS pension deal to the time of Bennet's stock sales, the price of JP Morgan Chase stock fell from about $45 a share to about $25 a share.

Bennet and current DPS officials have said JP Morgan and other firms involved in the pension refinancing were chosen by competitive bid, and that Bennet did not have a role in picking the firms.

School board member Bruce Hoyt, a supporter of Bennet who is in the securities business, said any Bennet holdings or DPS fees paid to Wall Street would have been so tiny compared to Morgan's $67 billion in 2008 revenue that the relatively small amount of stock was "less than immaterial," and a "non-issue."

A Denver Public Schools spokesman said the district does not know whether Bennet disclosed his JP Morgan holdings at the time. But the district consulted with inside and outside counsel last week, and those attorneys say such disclosures weren't necessary in this case.

There is "no legal or ethical requirement," the district statement said, "to make a disclosure of ownership of an insubstantial amount of common stock held in a publicly traded company where the Board Member or Superintendent would derive no benefit directly or indirectly from a commercial transaction."

Standing DPS policy on disclosures references state ethics rules, which include language defining "financial interest" as "a substantial interest held by an individual."

JP Morgan received $1 million for its bond work in 2008, and Citigroup $551,000 as a co-underwriter for DPS. DPS officials said they fielded seven competitive bids for the underwriting spots, and hired an independent consultant in Royal Bank of Canada to narrow the field. Bennet did not have any decision-making role in choosing the bond firms, those officials said.

The state GOP pushed the story againtoday, blasting Bennet for the DPS pension deal and for failing to disclose the JP Morgan stock.

"Michael Bennet committed Denver Public Schools to a risky finance scheme and failed to disclose his financial interest in the firm that benefited from the deal," said Colorado Republican Chairman Dick Wadhams.

And Swartout, with Buck's campaign, pointed to contributions JP Morgan's PAC made to Bennet.

"Bennet also needs to tell voters why the same Wall Street executives who profited from this risky deal are now filling his campaign coffers with donations," Swartout has said.

Two donations of $1,000 each from a JP Morgan political action committee to the Bennet campaign do appear on the PAC's disclosures with the Federal Election Commission. Those donations were canceled out, though, in August 2010, according to the FEC records. The Bennet campaign said it never received any money from the PAC. The JP Morgan Chase PAC office in Chicago did not return a phone call seeking comment.

The DPS pension deal has come up before in the former school chief's campaign to win his appointed seat.

Primary challenger Andrew Romanoff made an issue of the transaction over the summer, with some current school board members saying they don't understand the details of the deal and seeking more information.

In the April 2008 transaction, DPS issued $750 million in bonds, with $400 million going to shore up the underfunded pension plan and the rest paying off a previous debt.

At the time, DPS needed to improve its pension funding in order to achieve its longtime goal of merging with the state PERA pension funds. That merger gave teachers the freedom to carry their pensions with them rather than starting over if they left DPS for another district, or were hired by DPS from another district. Recent audits and PERA reports have shown the DPS portion is now funded at a higher level than other divisions.

With the new debt, Bennet, then-chief operating officer Tom Boasberg (now superintendent), and bond advisors agreed to complex financing terms. The interest rates DPS paid would change periodically, similar to an adjustable home mortgage. But the rates would be reset during bidding periods from bond firms, and during the 2008 crisis on Wall Street, DPS at first paid more interest than it had predicted.

Since the markets have settled, DPS now says it is achieving the interest savings it expected when it proposed the deal, and that the district has had to make far fewer cuts than surrounding districts as a result.

The current chief operating officer, David Suppes, has said in the last fiscal year DPS saved $18.6 million from what its costs would have been without the refinancing.